Gambler loses bid to dismiss insider trading case after FBI leaks

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By Jonathan Stempel | NEW YORK

NEW YORK A federal judge has rejected Las Vegas
gambler William “Billy” Walters’ bid to dismiss criminal insider
trading charges after an FBI agent admitted to leaking details
about the probe to reporters.

In a decision on Wednesday, U.S. District Judge Kevin Castel
in Manhattan said Walters failed to show he was prejudiced by
the leaks, and that their “limited effect” on the complex probe
into Walters’ alleged illegal conduct weighed against dismissal.

The judge also rejected Walters’ argument that the FBI
agent, David Chaves, might have leaked information about other
white-collar cases, and that this “history of prosecutorial
misconduct” justified dismissal of the indictment.

Castel called the potential for a pattern of leaks by the
FBI “concerning,” but said it “would not raise such serious
questions about the fundamental fairness of the process that
resulted in this indictment.”

Barry Berke, a lawyer for Walters, did not immediately
respond on Thursday to requests for comment.

Prosecutors accused Walters of making more than $40 million
through insider trading on tips from former Dean Foods Co
chairman Tom Davis, in a scheme that entangled Phil Mickelson,
the professional golfer.

Mickelson was not accused of wrongdoing, but agreed to pay
back more than $1 million that the U.S. Securities and Exchange
Commission said he obtained by trading Dean Foods shares.

Davis has pleaded guilty and is cooperating with
prosecutors. The leaks are also being probed by the U.S.
Department of Justice.

The case is U.S. v. Davis et al, U.S. District Court,
Southern District of New York, No. 16-cr-00338.



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